Reliance Info Breaks Even

Mumbai, September 29: | Updated: Sep 30 2003, 05:30am hrs

Reliance Infocomm is set to register profits by the year-end. According to a report on the website of Financial Times - ft.com - the company has already broken even. The report quotes Reliance group chairman Mukesh Ambani, who said this was a global record. Mr Ambani is quoted in the report as saying: In the conventional and fully audited sense of the term, we will be in net profit within the next two quarters.

When contacted by FE, a Reliance Infocomm spokesperson said: The project is on track to register profits by the end of this year.

Reliance Infocomm is the convergence and broadband arm of the group and the project is viewed as being among the most ambitious from the group to date. The project was initially envisaged with a huge investment of Rs 25,000 crore. This has reduced significantly on account of equipment manufacturers slashing prices in the wake of a depressed telecom market worldwide. The FT report also quotes Mr Ambani as saying: We are paying between half and a quarter (of what competitors are paying) in capital costs.

The details of the Infocomm project were announced in December last year. The limited mobility (WLL) service branded Reliance IndiaMobile has, in fact, crossed the five-million mark (see adjoining report). In the report, Mr Ambani also says Reliance Infocomm has achieved a sustainable revenue model in which it ploughed back subscriber revenues back into its expansion programme.

Reliance Infocomm has a host of offerings as part of the foray into the broadband arena. The company is in the process of completing its Reliance WebWorld which is the retail end of the project. These stores offer facilities such as videoconferencing, web surfing and music downloads apart from the WLL service. The company has in place an extensive optic fibre cable (OFC) network to the extent of 60,000 kms. Over time, Reliance Infocomm is expected to announce its plans for its proposed foray into the national and international long distance segments.